What is Executive Employment Agreement Drafting?
An executive employment agreement is a legal contract between an executive leader, such as a CEO, and a company.
Drafting it requires customizing the agreement to the specific parties involved, while covering essential elements of the leader’s employment, such as rules related to their compensation and duties.
Read the rest of this article to explore what’s typically included in an executive employment agreement, how to draft it, and how a qualified lawyer can help you with the process.
What Should You Include in an Executive Employment Agreement?
An executive employment agreement should provide clarity on key terms, such as the following:
- Title. The executive leader’s title, such as CEO, must be stated.
- Duties. The agreement should explain all the responsibilities the leader will have to fulfill.
- Compensation. How the leader will be compensated must be defined. This should include information about base salary, bonuses, benefits, and other perks.
- Termination. This outlines how parties can end the agreement, such as what notice periods are required.
- Severance. This section of the agreement provides clarity on pay and benefits the executive leader will receive after contract termination.
- Confidentiality. The executive leader will agree to keep all sensitive company information confidential. This includes not sharing information with third parties before gaining the company’s authorization.
How Do You Draft an Executive Employment Agreement?
When writing the terms of an executive employment agreement, it’s important to tailor the agreement to the parties involved. Consider these tips during the drafting process.
Outline Termination Provisions
How the agreement can end should be included for clarity. Termination “for cause” should explain the grounds for instant dismissal, such as fraud. On the other hand, if there’s a “without cause” termination, the agreement should outline the severance the leader will receive upon their dismissal.
Clarify Compensation
When mentioning compensation, the agreement should explain what salary and bonuses the executive leader will receive under the employment terms. It should be comprehensive, such as by explaining what happens to their compensation if their employment ends suddenly.
Include Restrictive Covenants
To protect the company’s interests, the executive employment agreement should specify non-compete and non-solicitation clauses. These need to be reasonable to prevent the executive from missing out on future career opportunities.
Consult the State Laws
You should always check your specific state laws regarding executive employment agreements so that all provisions are legally compliant and enforceable. Bear in mind that the agreement should also meet ethical and industry standards.
Address Intellectual Property (IP)
Since the executive might create IP, such as strategies or software, under the agreement, it’s important to protect IP ownership. Make sure you clearly assign ownership rights to protect the content from violations or ownership disputes.
Avoid Generic Templates
While it’s tempting to purchase a generic agreement template online, this can be risky. Your executive employment agreement should include customized, important details. These include information regarding equity and post-employment details.
Since you want to avoid having gaps in the agreement that will only show up when there’s a challenge, hiring a qualified lawyer to draft your executive employment agreement for you ensures it can include provisions to protect you against future risks.
How Does a Lawyer Help You Draft an Executive Employment Agreement?
Working with a lawyer to draft your agreement is advisable as it will help you avoid costly legal or financial mistakes. Here’s what a qualified lawyer can do to help you during the executive employment agreement drafting process.
- They’ll help you to clarify how compensation and severance will be handled under the agreement.
- They’ll explain future risks that you might not realize during the drafting process.
- They’ll evaluate your leverage during negotiations with the employer, helping you to secure favorable agreement terms.
- They’ll explain how employment laws in your state affect the agreement.
- They’ll include fair confidentiality clauses to protect your rights and interests.
- They’ll customize the agreement according to the executive’s role.
- They’ll draft termination clauses that protect both parties.
- They’ll draft non-compete, non-solicitation, and non-disclosure provisions that are legally valid and enforceable.
- They’ll use their experience to anticipate potential areas of disagreement so that you can protect yourself.
- They’ll keep the contract compliant with all applicable laws, such as those regarding wages, restrictive covenants, taxes, and more.
- They’ll use simple, clear language instead of vague wording. This helps to ensure both parties understand the agreement and can avoid disputes.
- They’ll review your executive employment agreement if you’ve already drafted it, giving you peace of mind that all its clauses are clear and legal.
Where to Find a Lawyer for Executive Employment Agreement Drafting
If you need to hire a lawyer to draft your executive employment agreement, you might wonder where to find one. Online legal platforms such as ContractsCounsel make the process of finding and hiring a lawyer easy.
ContractsCounsel is one of the largest online legal marketplaces that gives you access to a network of vetted lawyers who are experienced in contract drafting. All lawyers on the platform have expertise and experience to assist you.
Here are the steps to follow when requesting that a vetted lawyer on the platform drafts your executive employment agreement:
- Go to the ContractsCounsel marketplace.
- Post your project for free. Try to include a few details to help you find the most suitable lawyer, such as the executive leader’s role and the type of company involved in the agreement.
- Receive multiple bids from lawyers directly on the platform who have the experience to help you.
- Review the lawyers’ profiles. ContractsCounsel gives you a range of lawyer data you can review before choosing a lawyer to work with. This information includes the lawyers’ location, client ratings for previous projects, expertise, and credentials.
- Connect with a lawyer you think is best suited to your requirements and hire them to draft your agreement for a flat fee.
